The process to find N Chandrasekaran’s successor at Tata Sons formally began on Thursday, with the Sir Dorabji Tata Trust (SDTT) passing a resolution to initiate the setting up of a Selection Committee — even as a directive barring the Sir Ratan Tata Trust (SRTT) from holding meetings leaves a key part of the succession mechanism in limbo.
“The Trustees of the Sir Dorabji Tata Trust have passed a resolution to initiate the setting up of a Selection Committee as soon as possible in accordance with the Articles of Association of Tata Sons, for the purpose of recommending a person for appointment as the new Chairman of the Board of Directors,” SDTT, the largest shareholder of Tata Sons with a 27.98% stake, said in a statement.
The move came a day after Chandrasekaran wrote to the Tata Sons board that he would not offer himself for reappointment when his term ends on February 20, 2027.
SDTT said it respected Chandrasekaran’s decision and placed on record its “deepest appreciation” for his contribution and stewardship of Tata Sons and the group over the past decade, thanking him for “a period of significant change, growth and transformation.”
It pledged “full support” to Tata Sons for a smooth, timely and orderly leadership transition consistent with the values and long-term interests of the holding company and the group.
The resolution, however, does not by itself clear the procedural thicket surrounding the appointment.
SRTT — the other principal promoter trust, with a 23.56% stake — is barred from holding meetings under a directive issued by the Maharashtra Charity Commissioner in May. While the boards of other trusts under the Tata Trusts umbrella met on Thursday, SRTT could not convene, and has therefore passed no corresponding resolution. Together, the two trusts control 51.4% of Tata Sons; the wider Tata Trusts hold 65.9%.
The restriction matters because the Articles of Association require both trusts’ participation in the succession process. Under Article 118, the Selection Committee comprises five members: three nominated jointly by SDTT and SRTT, one nominated by the Tata Sons board, and one independent outside person selected by the board.
The committee’s quorum requires a majority of the jointly nominated members, and its chairman is chosen by the two trusts from among their three nominees. “The three members nominated by the Trusts may or may not be members of the Trusts’ boards, but have to be jointly nominated by SRTT and SDTT,” a legal expert said.
In simple terms: SDTT can set the ball rolling, as it did on Thursday, but the committee cannot be formally constituted without SRTT. So long as the trust cannot meet, it cannot participate in the joint nomination the Articles demand.
Legal experts said one option before SRTT is to approach the Bombay High Court for a stay on the Charity Commissioner’s directive. The trust wrote to the charity authority last week seeking relief but failed to secure even a temporary reprieve; it is now believed to be weighing the High Court route in the coming days.
The trusts enter the process with reshaped boards. SDTT’s trustees include chairman Noel Tata, his son Neville Tata, former Titan Company CEO Bhaskar Bhat, TVS Motor chairman emeritus Venu Srinivasan, former defence secretary Vijay Singh and Mumbai-based lawyer Darius Khambata.
At SRTT, the trustees include Noel Tata, Srinivasan, Khambata, Ratan Tata’s younger brother Jimmy Tata, and Pune-based businessman and philanthropist Jehangir H C Jehangir. Singh’s term ends on Friday (today) as he opted out of renomination.
SRTT freeze poses hurdle
- Sir Ratan Tata Trust (SRTT), barred from meeting under Charity Commissioner’s directive, unable to pass matching resolution
- Committee needs three members jointly nominated by Sir Dirabji Tata Trust (SDTT and SRTT — impossible until the freeze lifts
- Trust may move Bombay High Court for a stay in the coming days